How to prepare your estate for the new year

The start of a new year is the perfect time to review your estate plan. Estate planning is not a one-time task but an ongoing process that should reflect your current circumstances and future goals. In this blog post, we’ll explore key areas to assess at the beginning of each year and guide you on when to update or amend your estate plan, particularly considering age or health changes. 

How Often Should You Review Your Estate Plan? 

It’s recommended to review your estate plan every two years, or sooner if significant changes occur. Life events, health complications, or changes in your financial situation may necessitate updates to your Will, Enduring Powers of Attorney, and other key documents. Make it a tradition to assess your estate planning documents every New Year and use this checklist to guide your review. 

1. Assess Life Changes

Think about any major events since your last review. Have you married, divorced, had children, or experienced any health issues? These life changes may require amendments to your estate planning documents. For instance, appointing guardians for young children or updating beneficiary nominations is crucial if your family dynamic has shifted. 

2. Have the Difficult Conversations

Discussing your estate plan with loved ones can be uncomfortable but is essential for avoiding disputes in the future. Talk to family members about your wishes for who should make decisions on your behalf if you’re incapacitated, who will manage your estate, and how your assets should be distributed. These conversations can help reduce confusion and stress after your passing. 

3. Review Your Beneficiaries

It’s important to regularly review who is set to receive your assets upon your death. Have any of your beneficiaries experienced significant life changes, such as marriage or the birth of a child? Ensure that any monetary gifts, property bequests, or loans are still relevant and up to date. If you’ve had a recent divorce, it’s vital to remove your ex-spouse from your documents. 

4. Update Your Will

Your Will determines who receives your assets and who will handle your estate. Review it to ensure your appointed Executor is someone you trust and that your assets are divided as you intend. Keep in mind that certain assets, like superannuation and joint accounts, pass outside of your Will, so make sure to review those separately. 

5. Enduring Power of Attorney and Advance Care Directive

An Enduring Power of Attorney allows someone to make decisions about your financial and legal affairs if you become incapacitated. Likewise, an Advance Care Directive appoints someone to make healthcare decisions for you. Review both of these documents to ensure your appointed agents are still suitable and your wishes are clearly expressed. 

6. Guardianship of Minor Children

If you have young children, ensure you’ve nominated a guardian to care for them in the event of your death. Review whether the chosen guardians are still appropriate and able to take on the responsibility. 

7. Superannuation and Life Insurance

Superannuation and life insurance policies often bypass your Will, so it’s important to review your beneficiary nominations for these assets. Ensure they are aligned with your estate plan to avoid confusion. 

Final Thoughts 

Estate planning is an ongoing process that requires periodic updates. By reviewing your documents regularly and ensuring they reflect your changing circumstances, you can help ensure your wishes are honoured and your loved ones are well taken care of. If you’re unsure about any aspect of your estate plan, consider seeking advice from an experienced estate planning lawyer.